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Hong Kong-based telco posts 52% decline in turnover in first half of 2016 as hardware revenue in mobile segment plummets.
Hutchison Telecom’s Hong Kong and Macau business posted a sizeable fall in revenues in the first half of 2016, largely due to the lack of available smartphones.
The telco, formally known as Hutchison Telecommunications Hong Kong Holdings (HTHKH), saw revenues for the six months to the end of June decline by 52% to HK$5.32 billion (€613 million) compared with the first half of last year.
Service revenue slid by just 1% to HK$3.83 billion, but hardware revenues dropped by 79% to HK$1.5 billion.
"The revenue of the group was significantly affected by lower hardware revenue in the first half of 2016 as a result of the lack of popular smartphones being available in the market during the period," HTHKH said in its first-half report. "This in turn impacted adversely on the financial result of the group."
Indeed, group EBITDA fell by 14% to HK$1.25 billion, while profit attributable to shareholders was down by 26% to HK$376 million.
HTHKH’s mobile business in Hong Kong and Macau accounted for almost two thirds of group revenues in 1H, bringing in HK$3.47 billion, down 62%; mobile service revenue fell by 6% to HK$1.97 billion, hit by a reduction in roaming revenues.
The business claimed 3.1 million customers at the end of June, up from 3 million at the start of the year.
"The launch of various infotainment content and related data plans led to [a] positive customer response with [the] acquisition of more data-centric customers, and blended local postpaid net ARPU for the first half of 2016 increased to HK$168," HTHKH chairman Canning Fok said in a statement accompanying the numbers.
"This represented an increase of 6% compared with HK$158 for the first half of 2015," he added.
In addition to its mobile operations, HTHKH provides fixed-line services on a local and international basis. Its fixed-line posted a 4% revenue hike to HK$2.07 billion, but EBITDA slipped by 1% to HK$647 million.
The revenue improvement "was mainly the result of an increase in revenue from the international and local carrier market driven by growing data demand from over-the-top (OTT) applications and Internet of Things (IoT)-related devices," Fok said.
The telco’s fixed operation also saw an increase in revenue from the corporate and business sector, but its residential market turnover declined due to a fiercely competitive environment, he said.
